Bank of Mum and Dad calls in debts - Money - News - Moneyfacts

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Bank of Mum and Dad calls in debts

Bank of Mum and Dad calls in debts

Category: Money

Updated: 20/08/2010
First Published: 20/08/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Recession-hit parents are turning to their grown-up children to help them through the tough times.

Almost one in ten adults had given or lent an average of £8,250 to their parents in 2009 - an increase of £1,750 from 2008's figure, research by Scottish Widows shows.

Of those parents, over a third (37%) had said they had used the money to pay off debt.

Worryingly, whilst in 2008 only 14% of parents said they had used the money given to them by their children for spending money/living expenses, in 2009 the figure had jumped to one third (33%), demonstrating how crucial these funds can be.

However, the research reveals that children had borrowed substantially more from their parents over the years – almost £5,000 more to be exact.

"At a time when most people are tightening their purse strings, families have to resort to helping each other out, and this is likely to become ever more prevalent," commented Iain McGowan, savings expert at Scottish Widows.

"The amount of money given by parents to their children is huge, to the extent that the overall 'sap fund' of children from their parents' savings is well in excess of £60 billion.

"So it's no surprise that significant holes are left in parents' finances and these will need to be filled in somehow, whether by sapping funds back from their children or by other means.

"Indeed, it is likely more parents will have to ask their kids for money in the future, particularly parents who are near to retirement and are struggling to put enough money aside."

"This reinforces the need for parents and children to plan their finances and start preparing as soon as possible."

If your savings have been eroded by cash-strapped parents or children, why not check out the Moneyfacts Best Buy tables in order to find the best return for your investment.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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